Monday, June 7, 2010

Comparison of Subsidies to Energy Sources

The Global Subsidies Initiative made a table summarizing subsidies to major energy types.

Table: Estimates of Global Subsidies to Energy Sources in 2007

Energy type

Subsidy estimate (US$ billion/year)

Energy produced (2007)

OECD share of production (2007)

Subsidies per energy unit (US$/kWh)

Nuclear energy

45

2,719 TWh electricity

0.84

1.7

Renewable energy (excluding hydroelectricity)

27

534 TWh electricity

0.82

5.0

Biofuels

20

34 Mtoe

0.68

5.1

Fossil fuels

400

4,172 Mtoe

n/a

0.8

Some people might think,

'Renewable energy is receiving more subsidies than fossil fuels per unit energy produced!'

But we have to take into account the economy of scale effect. Global subsidies to renewable energy (27 billion US dollars) were less than 7% of non-OECD subsidies given to fossil fuels (400 billion US dollars).

In addition, there are the rapidly increasing 'learning by doing' effects in reducing renewable energy's dependence on subsidies. (Subsidies are endowed in the forms of feed-in tariffs and renewable portfolio standards.)
To understand the 'learning curve' prospects for renewable energy sources, the International Energy Agency's low-carbon energy technology roadmaps might be helpful. (Find them at http://www.iea.org/roadmaps.)